DOE to require oil firms to unbundle prices of petroleum products

By Lenie Lectura-  May 8, 2018

https://businessmirror.com.ph/doe-to-require-oil-firms-to-unbundle-prices-of-petroleum-products/

A POLICY that will require oil firms to unbundle the prices of petroleum products will be issued at end-June this year, the Department of Energy (DOE) said on Tuesday.

The agency said this new policy enables the unbundling of the base prices of petroleum products—gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker-fuel oil, and household and automotive liquefied petroleum gas. 

Oil companies will be required to provide a weekly notice of the price adjustments—whether this be a decrease, an increase or no adjustment—along with the computation of their products’ components based on the elements involved in the international price movement, biofuels cost and operational-cost recovery.

Energy Secretary Alfonso G. Cusi said the weekly oil-pricing updates by oil firms would guide the consumers in making informed decisions in the management of their fuel-oil requirements.

 “Identification of the costing for the major components of these petroleum products that may affect the pump prices would provide a higher level of transparency for our consumers, particularly the motorists,” Cusi said.

The same policy will require oil companies and retail outlets to submit baseline data every end of the year for the unbundling of their base price and to comply, as well, with the mandatory price-display board. In preparation for the issuance of the new policy, the DOE, through the Oil Industry Management Bureau, is currently conducting consultations with industry stakeholders.

Initial consultations with various companies were held on May 2.

The DOE has scheduled the conduct of two more focused-group discussions within the month to finalize the new policy.

The new policy is pursuant to the DOE’s mandate under Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1998, to monitor both international and domestic price movements of petroleum products.

Earlier, consumer advocacy group Laban Konsyumer Inc. (LKI) called on the DOE to compel oil firms to unbundle the retail prices of petroleum products.

This is meant to enable consumers to truly enjoy their right to information, and thereby provide them access to fair and reasonable pricing of petroleum products and electricity, LKI President and former Trade Undersecretary Vic Dimagiba said.

“The DOE will note that oil companies and the new players have practically uniform prices for diesel. This situation does not appear tenable since oil companies and new players procure their products differently,” Dimagiba said.